Tourism Tax Collections Climb

The state’s tourism director is betting that Wal-Mart shoppers standing in Houston checkout lines will decide a trip to the “Natural State” sounds like a good idea, an impulse purchase.

Joe David Rice said part of his annual $12 million advertising and promotion budget is spent running spots on Wal-Mart Television in south Texas. The demographic is a good fit, he said, because Texans are a primary feeder of tourist trade to Arkansas, not including business travel.

It looks like Rice and CJRW, the Little Rock ad agency of record for the Arkansas Department of Parks & Tourism, might be on to something. From 2003 through 2007, collections on the state’s 2 percent tourism tax grew nearly 33 percent to $11.47 million.

Only 11 months of collections were available for 2008, but it appeared to be tracking to meet or beat ‘07 with a total of $11.17 million collected through the end of November.

That means more than $558.9 million was spent statewide in 2008 on lodging, camping, theme parks and marinas (the four things the tourism tax applies to).

In Northwest Arkansas, collections grew at a more modest pace of 20.6 percent during the five-year span.

That reflects spending of $148.6 million during 2007 in Northwest Arkansas. For the 11 available months in 2008, it was $146.5 million, or total collections of $2.93 million in Benton, Carroll, Crawford, Madison, Sebastian and Washington counties.

The six-county corner of the state represents a little more than a quarter of the total tourism tax collected in the state, which is down about 3 percent from its 2003 market share.

Pulaski County, home to Little Rock, represented about 24 percent of the state’s collections for the 11 months in 2008. Its total collections are up 42 percent for the five-year span.

Garland County, where Hot Springs is located, pulled in about 9.5 percent of total collections for 2008. Hot Springs has multiple attractions such as the Magic Springs theme park, Oaklawn Racing and Gaming, as well as historic hotels, spas, multiple lakes and beautiful scenery. Its collections were up more than 36 percent for the five-year period.

Travel Conscious

Rice said the ADP&T and the Arkansas State Highway Department have recently opened a series of visitor centers in places like Texarkana, Van Buren (valued at $4 million each), El Dorado (valued at $3 million) and Corning (valued at $2.5).

Centers at Blytheville and Lake Village will open in early 2009 and West Memphis is on the horizon. Rice said the centers no longer serve as depositories for piles of brochures, but are staffed with knowledgeable, helpful people and provide travelers with useful information.

Rice said one reason collections are up over the past five years is that the state has continued to add attractions, like the William J. Clinton Presidential Library, the Lakeport Plantation in Lake Village and Arvest Ballpark in Springdale.

In 2004, Rice told the Business Journal the ADP&T was trying to attract more women to the state, that many had the impression Arkansas was great for hunting and fishing but they weren’t convinced it was a place for them.

Rice said recently that his gut feeling is the ADP&T has been successful and that the agency promotes girlfriend getaways on its Web site and is showing more dining, shopping and spas options in its advertising.

“We’re trying to show outdoor attractions but also show they can stay in a bed and breakfast … and have a glass of wine with dinner,” he said.

Upswings

Benton County was Northwest Arkansas’ top performer, by far with a 71.3 percent increase in tourism-tax collections.

The increase may be deceiving, though, from a tourism standpoint. Much of the state tourism tax comes from lodging, and the majority of travel to Benton County is from business travelers, suppliers and vendors in town to call on Wal-Mart Stores Inc.

Both Tom Gaylon, executive director of the Rogers Convention and Visitors Bureau, and Kalene Griffith, president of the Bentonville A&P Commission, said the number of hotel rooms in their respective towns has doubled in recent years, and that’s a one reason the collections have jumped so dramatically.

Gaylon said the John Q. Hammons Convention Center that opened in 2006 also represents a paradigm shift for the county. Now, he and Griffith, who work closely together, can attract other trade associations and industries to the venue that will help fill hotel rooms on the weekends.

Gaylon said he’s looking forward to the opening of the Crystal Bridges Museum of American Art, which is now slated for 2010. He said cultural tourism should contribute to Benton County’s revenue growth.

A study done by the museum said that as many as 250,000 people per year will visit its facilities, but that number includes locals and repeat visitors.

Gaylon’s office spent about $200,000 on marketing Rogers and Benton County last year, which was collected with a 2 percent tax on lodging within the city. His 2009 budget calls for about $250,000, he said, mostly on e-marketing and on a DVD.

Griffith’s office spent about $480,000 on advertising and promotions in 2008, she said.

Crawford County also saw an upswing, almost 56 percent in five years.

Maryl Koeth, director of the Van Buren advertising and promotions office for the past 18 years, attributes the growth to new hotels in her city.

Her marketing budget for 2008 was $250,000, most of which was spent on billboards.

Eureka Slips

Carroll County, home to Eureka Springs, slipped just less than half a percent in tourism-tax collections during the five-year span, though 2005 was a spike and beat 2003.

Jim Williams, director of the Eureka Springs Advertising & Promotion Commission, has only been at his job about a year and a half.

He said 2008 started off “gangbusters,” up 7 percent to 9 percent, but as the election drew near, tourism in his town dropped off.

An old timer told him it always does in an election year.

His marketing budget increased from $190,000 in 2007 to $440,00 in 2008, mostly because he and his staff figured out ways to not lose money on festivals.

“We were successful on staying in budget on all the events we had last year,” he said. “We won’t be dumping money into those. We’ve figured out how to get sponsorships and soften the blow on some of that.”

When he arrived, the city was loosing $40,000 to $50,000 per festival, he said.

One thing new offered in Eureka is a revised script for the Passion Play, he said. It’s been modernized and people seem to like it, he said.

Williams was in favor of the spots running on Wal-Mart TV in Houston.

“I believe that Joe David is right,” he said. “I’m amazed by the number of visitors [Eureka Springs] has from Houston.”

Smurf or SMERF?

SMERF is an acronym used by the hospitality industry standing for Social, Military, Educational, Religious and Fraternal, indicating market segments for banquet rooms and meeting facilities.

A Smurf is a tiny blue fictional character created in 1958 by Belgian artist Pierre Culliford.

Tom Gaylon, executive director of the Rogers Convention and Visitors Bureau said he has been focusing on the religious segment of SMERF to help boost tourism in Benton County.